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Weekly ProShares review -- bulls still at work but enthusiasm has waned

For the last couple of weeks I have been presenting a list of the ProShares ETFs that had exhibited the strongest performance over the course of the last week. I received a number of comments over at Seeking Alpha requesting that I do it again but I haven't had much reaction since then. If you find this useful please leave a comment and let me know!

A short recap on leveraged ETFs and why I look at them --

The ProShares leveraged ETFs are primarily short-term trading vehicles and, as such, they can be viewed as indicators of short-term sentiment.

Since these ETFs come in so many styles and sectors, looking at the leaders among them can paint a picture of those areas of the market in which short-term investors are currently most interested.

The following table lists those members of the ProShares family that have turned in the best performance over the course of the last week (the period from last Tuesday through this Monday). The last two weeks the criteria included any ETF with double-digit gains. This week there's only one ETF in that category so we have included all those ETFs with a 5% gain or more.

Note also that I compare this week's average volume to the previous week's average volume. Increased volume may confirm increase in price as an indicator of a move with staying power.

Symbol

Fund Name

Group

Objective

Percent Change - Price

Percent Change - Avg Volume

XPP

Ultra FTSE/Xinhua China 25

Ultra

200% of the underlying

10.1%

-9.2%

EET

Ultra MSCI Emerging Markets

Ultra

200% of the underlying

7.8%

16.4%

UYM

Ultra Basic Materials

Ultra

200% of the underlying

6.6%

-24.1%

USD

Ultra Semiconductors

Ultra

200% of the underlying

6.6%

-51.1%

UPRO

UltraPro S&P500

Ultra

300% of the underlying

6.3%

7.4%

UXI

Ultra Industrials

Ultra

200% of the underlying

6.2%

26.2%

DIG

Ultra Oil & Gas

Ultra

200% of the underlying

6.0%

-39.2%

UWC

Ultra Russell3000

Ultra

200% of the underlying

5.9%

-32.8%

UCO

Ultra DJ-UBS Crude Oil

Ultra

200% of the underlying

5.8%

-16.0%

QLD

Ultra QQQ

Ultra

200% of the underlying

5.7%

-22.0%

UPW

Ultra Utilities

Ultra

200% of the underlying

5.5%

11.0%

EZJ

Ultra MSCI Japan

Ultra

200% of the underlying

5.5%

-38.5%

EFO

Ultra MSCI EAFE

Ultra

200% of the underlying

5.4%

-13.6%

ROM

Ultra Technology

Ultra

200% of the underlying

5.3%

-32.5%

With the yuan exchange rate news, it's not a surprise to see XPP at the top of our list today. Note, however, that out of the week's 10% gain, almost 7% of that gain came today. In a broader context, EET has also moved up nicely and steadily over the course of the week and the gains came on increasing volume to boot.

Two big themes of the recent bullishness have been Basic Materials and Industrials. We see two ETFs in these sectors continue to occupy spots near the top of this list. UYM gained over 6% but volume was down 24%. On the other hand, UXI also gained over 6% but volume increased this week by 26%. With many economic reports pointing to a real recovery in manufacturing, investors are still jumping into this sector with conviction.

It wouldn't be a Trade Radar post if I didn't touch on the tech sector at some point. Despite mixed outlooks from various analysts on the semiconductor sector, investors are voting with their dollars and USD turned in the fourth best performance this week though volume was down 50%. Similarly QQQ and ROM were both up while volume declined.

Utilities are a typically defensive holding and interestingly we see that UPW, the Ultra Utilities ETF, advanced this week on an increase in volume.

Conclusion --

Bulls still rule as, once again, all the top ETFs are double long Ultra ETFs this week. Still, the decrease in volume shows investors may be getting skittish with some of the riskiest sectors.

Disclosure: long ROM and USD

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Comments

Anonymous said…

I've been holding QID for about a year. A sort of whim long-term hedge. Had a roll-over that I'd toyed with putting in an Asian or foreign index as a long term hedge against my limited choice 401K (slightly Nasdaq weighted). Is this a crazy way to hedge? A long term sure failure? So far it has seemed that way, but it looks like it may even out soon. It's only 1% of my total "portfolio", and if I felt I could find a better long hedge against my 401K Vantage holdings I would have added to it. Just curious. Thanks for sharing your thoughts.

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